Friday, September 18, 2009

Strategic Planning Analogy #277: Strategy is Like Dancing

THE STORYThis summer, I did something I have never done before—dance. I did not dance at my own wedding. I did not dance at my daughter’s wedding. But this summer, I danced at my niece’s wedding.

Okay, it was for less than one song, and it was more a kind of swaying on the dance floor than a real dance, but I did it (and it made my wife happy).

Don’t expect to see me on any time soon on any of those dance competition shows on TV.

THE ANALOGYDancing well requires a lot of effort and preparation. It takes many hours (even months or years) of preparation beforehand in order to look good for just a few minutes on the dance floor.

On the TV show “Dancing With the Stars,” they show some of the grueling practices in order to prepare for the short performance. If you just get on the dance floor like I did, with no preparation, you are going to look awful.

In the business world, sometimes you have only a brief moment in which to convince consumers to vote for your brand. If they don’t like what they see, they will send you away. If you want your performance to shine, you need to prepare—just like in dancing.

This is the essence of strategy—to properly prepare your business to perform well when it’s show time.

THE PRINCIPLEThe idea here is that strategic planning is a lot like dancing. Great dancing occurs when there is great coordination—coordination with the music and coordination with the dance partner. Strategic planning is a process to create that coordination.

1. Coordination With The MusicMusic creates the environment in which you are dancing. If your dancing is out of step with the music, you will look bad, even if your athletic ability is sound. Dancing a fast cha-cha to slow, romantic music will appear inappropriate and will not get you the votes you want from your audience.

The same is true in business. Businesses do not operate in a vacuum. They operate within a business environment. This is the music of the business world. If you want to succeed in your business dance, you’d better be in sync with that business environment. Don’t have a cha-cha strategy when the world is playing a slow waltz.

Take Abercrombie and Finch, for example. During the recent economic collapse, they refused to alter their strategy of charging a top price for their top brand. Abercrombie and Finch were not listening to the music of their environment. The mood had shifted. Due to the economic environment, people were more willing to trade away certain brands in order to get a better price/value. Abercrombie and Fitch lost a ton of market share to firms like Aeropostale, whose pricing strategy was more in tune with the music of the day.

As another example, in many sectors today the music of the business environment now has a “green” rhythm to it. If you are not into environmental sustainability, you are out of step with the beat.

For strategy, this implies that an important function is to always have your ears listening to the music of your environment. Listen for when the song changes, and be ready to dance the appropriate dance that the new song requires. No environment lasts forever. Moods change and tempos change. Therefore, you must change.

a) Environmental Analysis Should Be an Ongoing ProcessTherefore, I recommend that your strategy function do two things. First, do not treat environmental analysis as an infrequent event. Instead, treat it as an ongoing process. Never stop listening to the music of your world (or you may miss it when the song changes). Never stop trying to understand your environment better.

Even if the music does not change, one can benefit from getting more intimate with the music of your environment. When I was a teen, I spent a summer working at a public swimming pool. Every morning, all summer long, there was a group of synchronized swimmers practicing for a competition at the end of the summer. Every morning, I had to listen to that same song they were practicing to—over and over again.

The music drove me crazy, but the repetition made the synchronized swimmers better. The better you know the music, the easier it is to stay in sync. Dive deep in your environmental analysis so that you better understand what is going on. And make sure you “play the music” in the office everyday, so your employees do not forget the world in which business transactions are taking place out in the field.

b. Have a Repertoire of DancesIf you only know one way to dance, then you will be unprepared when the music changes. This is where scenario planning fits in. In scenario planning, you look at the environment and how it would play out under different scenarios. This is like looking at how the world could end up playing different songs. Then the job is to prepare a dance/strategy for each song/scenario. That way, you are ready when the song changes.

Procter and Gamble was performing a dance similar to Abercrombie and Finch—premium prices for premium brands. It took them a long time to adjust their dance to the new song, created by the harsher economic environment. They are finally taking some steps to appeal to the new tempo by introducing Tide Basic to the US and converting Cheer to a value brand.

However, the song changed a long time ago and many already abandoned P&G for those brands which were dancing more in step with the times. In fact, with a potential recovery coming, P&G may be getting in tune with this song just when the song may be about to change again. Without more flexibility in their repertoire, P&G could perpetually fall one song behind.

So you not only need a repertoire of dances, but flexibility in your strategic process, so that you can adapt quickly.

This is not to imply that core strategies should be continually changing. No, the core of one’s business should not change very often. However, the way you express that core business should adapt to the rhythm of the times.

For example, Wal-Mart’s core strategy is about being a low cost operator, so that it can offer lower prices. As the music shifted to a “greener” beat, they incorporated environmentalism into the strategy. But they did it in a way that reinforced the core. They used the elimination of environmental waste as a way to eliminate spending waste and thereby save even more money that can be passed on in lower prices.

2. Coordination With Your PartnersDancing well also requires dancing well with your dance partner. If you are not in sync with each other, the dance will fail. You will step on each others’ feet and fall down. In business, you can have many dance partners—suppliers, distributors, venture partners, outsourcers, and so on. Your successful dancing requires that both of you are on the same page of the strategic dance.

a) Choose Partners WellStrategy is about more than just choosing the right dance. Strategy has to include a path to performing the dance well. Part of the path involves choosing the right partners. Poor choices lead to poor dancing.

Before choosing a partner, ask yourself these questions: Does this partner have a similar philosophy/approach to business (are the trying to dance the same dance)? Are they an appropriate match in terms of size and capabilities (dancing rarely works if the partners are mismatched in size)? Will you be an important partner to them? How committed are they to making the dance a success?

b) Spend Time TogetherIt’s difficult to dance well with a partner if you don’t spend time with them. Coordinated dancing requires spending time together. How much time to you spend with your partners? How well do you know them?

Do you ever talk to your partners about strategic issues? Do you invite them to any of your strategy sessions? How can you expect them to dance in sync with you if you keep them in the dark about the type of dance you are trying to perform?

Many successful businesses have developed strong, long-term relationships with their partners, like the partnership between Intel and Microsoft. Frequent shifting of partners rarely leads to good dancing.

SUMMARYBusiness performance is a lot like dancing performance. If you want to perform well, you need the preparation of strategic planning to:

a) Get in tune with the music of the environment; and b) Get in sync with the steps of your partners.

FINAL THOUGHTSGreat dancing is more than just coordinating motor skills and getting the mechanics right. People do not want to watch robots get the steps right, but in a cold and heartless manner. They want emotion, flair, élan—an artistic performance. Never forget the emotional elements in devising and executing a strategy.

About Me

I have over 25 years of experience, having worked in strategy with a number of leading US retailers. You can learn more about me by visiting my digital resume (www.VisualCV.com/geraldnanninga) of the site for consulting (http://planninga-from-nanninga.webs.com)